$DAR bulls double their money in a day

Option traders have already turned quick profits on upside positions opened in Darling Ingredients only yesterday.

Investitute’s market scanners identified the purchase of 3,000 September $16 calls for $0.35 with shares at $15.76 yesterday afternoon. Open interest in the strike was only 321 contracts before the trade occurred, showing that this was new positioning.

Today those calls sold for $0.60, nearly doubling in value just 24 hours later. The stock was up only 3.1 percent at the same time, underscoring the kind of leverage that can be obtained through options.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

DAR gained 2.28 percent today to close at $16.18. The producer of food and fuel ingredients rallied ahead of a Commerce Department preliminary decision this afternoon to impose duties on biodiesel from Argentina and Indonesia in anti-dumping measure.